EU regulators block HeidelbergCement, Schwenk's Croatian deal

(Adds details on concessions)

By Foo Yun Chee

BRUSSELS, April 5 (Reuters) - EU antitrust regulators blocked on Wednesday a joint bid by German cement producers HeidelbergCement and Schwenk for Cemex's Croatian business after the companies failed to address competition concerns.

The European Commission said the companies' proposal to grant rivals access to a cement terminal in southern Croatia was not sufficient as it only offered a competitor access to a storage facility without existing customers, brands or established access to cement, confirming a Reuters story on March 28.

The EU antitrust enforcer said the combined market share of the merged company would be 45-50 percent in Croatia, and exceed 70 percent in some parts of the country. Local rivals and importers would not have been able to compete effectively.

"We had clear evidence that this takeover would have led to price increases in Croatia, which could have adversely affected the construction sector. HeidelbergCement and Schwenk failed to offer appropriate remedies to address these concerns," European Competition Commissioner Margrethe Vestager said in a statement.

HeidelbergCement and Schwenk had wanted to buy Cemex Croatia from Mexico's Cemex through their Hungarian joint venture Duna Drava Cement (DDC) in a deal worth about 250 million euros. DDC is the largest importer in the region and Cemex Croatia its biggest producer.

HeidelbergCement and Schwenk in December last year challenged the Commission's decision to review the case rather than leaving it to the Croatian competition agency. It will take months before a lower court in Luxembourg hears the cases.

The Commission said that in this case the parties did not offer to divest an existing cement business, unlike the solutions accepted by the Commission in cement cases such as Holcim's acquisition of Lafarge and HeidelbergCement's takeover of Italcementi. (Reporting by Foo Yun Chee; editing by Philip Blenkinsop)